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Defence group Chemring has backed away from a new executive pay plan after 40pc of shareholders objected to the proposed deal.

The company had hoped to replace its existing bonus scheme for senior executives with a new one, which it said would better align shareholders’ interests with management.

But after lengthy discussions with its top shareholders, and faced with the threat of a major rebellion at its annual general meeting on Friday, it decided to withdraw the proposals.

Carl-Peter Forster, chairman of Chemring, said: "We have been actively engaging with shareholders regarding long-term incentives for some time and, while we received majority support for the proposed revised approach, the...